The market's response to the U.S. FOMC remains the focus today. Dollar/yen recovered to the ¥156 level and is expected to remain firm following the decision to raise rates by 0.25%. Its direction will likely depend on the outlook for further rate hikes.
In the previous day's New York session, dollar/yen recovered to the ¥156 level after the U.S. Federal Open Market Committee (FOMC) decided on a 0.25% rate hike. Many market participants expect another hike this year, prompting dollar buying. Dollar/yen rose to around 156.42.
Dollar/yen is expected to remain firm today, supported by the FOMC's rate hike decision and expectations of further hikes, with trading centered around the ¥156 level. With the Bank of Japan's monetary policy meeting scheduled for tomorrow, excessive dollar strength and yen weakness are likely to be contained.
Euro/dollar fell into the 1.14 range in the New York session as the dollar strengthened. It remained heavy after testing the upside to the 1.1460s, and is expected to remain soft in the 1.14 range today. Euro/yen is expected to remain range-bound between the latter half of the ¥178 range and the first half of the ¥179 range, as yen weakness and euro weakness against the dollar offset each other.
Pound/dollar fell into the 1.33 range in the New York session as the dollar strengthened. It is expected to remain centered around the 1.33 range today, with upside likely to remain heavy. Pound/yen recovered from the latter half of the ¥208 range to the ¥209 range and is expected to trade mainly around the ¥209 level. Attention will be required ahead of the Bank of England's policy announcement.